With one week before Labor Day, we could be at the end of the summer slumber for interest rates. Typically, we’d expect market activity to increase with an end to the vacation season. However, this year, that natural increase is augmented by expectations for central bank announcements.

First up is the European Central Bank, which meets next week. Unlike the Federal Reserve, the ECB still has its money pumping spigot in full geyser mode. With European economies showing signs of life, expectations are that the ECB will begin to reduce the flow. When that happened in the US a few years ago, interest rates spiked for a few months. White ECB actions mainly affect European rates, we’d see some spillover effect in the US.

The Fed meets in the middle of the month, and markets expect it will announce the beginning of its balance sheet reduction plan. While the mechanics of the plan are known, some analysts think markets aren’t pricing in an imminent start point. If that’s true, and the Fed begins the taper right away, rates could bounce higher.

But this week’s economic data could temper all that potential excitement. This is a jobs report week, and we get the PCE data, the Fed’s preferred measure of inflation. If both are weak, especially the inflation data, rates could improve, not only because of the data, but because of its potential influence on the Fed’s tapering plans.